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Digital Business 2015-2016 Sharing economy and other major digital trends 1st Master HEC-Ulg André Blavier 1

HEC Digital Business. Sharing Economy and other trends

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Page 1: HEC Digital Business. Sharing Economy and other trends

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Digital Business2015-2016

Sharing economy and other major digital trends

1st Master HEC-UlgAndré Blavier

Page 2: HEC Digital Business. Sharing Economy and other trends

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1. Introduction to the course.Tools for your technology watch.

2. Introduction to the digital transformation.Data, Cloud, Social, mobile, GAFA, NATU, Giga economy, …

3. The digital platform.Web standards, API, apps, cloud based, (big) (open) data, …

4. E-business & digital marketing.SEM & content, permission, social, mobile, …

5. Data, Cloud and Sharing economyYour company facing the digital disruption, …

6. Digital business. Perspectives from the algorithmic world.Focus on the media sector and the industry 4.0, …

Table of content (adapted)

Page 3: HEC Digital Business. Sharing Economy and other trends

Mobile

Smartphones, tablets, IoT, Internet of Everything, … Permanent connectivity and interactivity blur the boundaries between

real and virtual worlds.Mobile technologies are the medium of

the digital transformationCloud

Unlimited development and storage capacities “As a Service” unlock the creation and deployment of digital projects on an unprecedented scale .Cloud computing is the platformof the digital transformation

EmpowermentSocial technologies disrupt the traditional relationships and pyramidal organization of our society. They enable

the disintermediation of organizations.Empowerment is the crowd driving

the digital transformation

DataGlobal, customizable, open, ... Their activation allows to consider the world from a complete new algorithmic and predictive point of view.Data are the fuel of thedigital transformation

3

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Big Data. Collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications. The challenges include capture, curation, storage, search, sharing, transfer, analysis and visualization.

http://en.wikipedia.org/wiki/Big_data

Analytics. Discovery and communication of meaningful patterns in data. Especially valuable in areas rich with recorded information, analytics relies on the simultaneous application of statistics, computer programming and operations research to quantify performance. Analytics often favors data visualization to communicate insight.

http://en.wikipedia.org/wiki/Analytics

Page 5: HEC Digital Business. Sharing Economy and other trends

5Source : IBM

The 4 V’s of Big Data. Volume

Page 6: HEC Digital Business. Sharing Economy and other trends

6Source : IBM

The 4 V’s of Big Data. Variety

Page 7: HEC Digital Business. Sharing Economy and other trends

7Source : IBM

The 4 V’s of Big Data. Velocity

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8Source : IBM

The 4 V’s of Big Data. Veracity

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Value. Data in itself is not valuable at all. The value is in the analyses done on that data and how the data is turned into information and eventually turning it into knowledge. The value is in how companies will use that data and turn their organization into an “information centric” company that relies on analytics and algorithms for their decision-making and business transformation.

Visualization. Another challenge is to make a vast amount of data comprehensible in a manner that is easy to understand and read. With the right analyses and visualizations, raw data can be put to use otherwise raw data remains essentially useless. Visualizations do not mean ordinary graphs or pie charts. They mean complex and dynamic graphs that can include many variables of data while still remaining understandable and readable.

Adapted from datafloq.com

… but also 2 other “V’s”

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• Making information more transparent. In the public sector in particular, making data more accessible will significantly reduce searching and processing time.

• Segmenting target audiences to customize the offer. Data volumes allow more segmentation and tailored services matching the most specific needs of customers.

• Better decision making with algorithms. Significantly improve decision making. Minimize risk-taking. Identify information with high added value.

• New business models. Using data from crowdsourcing to improve product development and to create innovative services.

Adapted from datafloq.com

“Classic” challenges of Big Data

Page 11: HEC Digital Business. Sharing Economy and other trends

11Source : Gartner

Data : 4 types of analytics capabilities

Page 12: HEC Digital Business. Sharing Economy and other trends

12Source : Gartner

... customer churn... sales revenue

... equipment failure…market volatility

... response to a marketing offer... fraudulent claims

... cybersecurity breaches... workforce attrition

... freight cost… credit risk

Predictive Analytics

Predictive models

Common TechniquesRegression

Decision treesNeural nets

Ensemble models

Page 13: HEC Digital Business. Sharing Economy and other trends

13Source : Gartner

... assign optimal price... find the best route... schedule resources

... give customers the bestnext offer

... allocate limited resources… optimize marketing mix

... acquire a company… select a site for a power plant

… decide where to drill for oil

Prescriptive Analytics

Decision Models

Common TechniquesOptimization

Linear programmingConstraint programmingDecision management

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Data are nothing …… if they are not activated by algorithms !

Page 15: HEC Digital Business. Sharing Economy and other trends

15Source : Gartner

3 core skills needed

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• Cloud computing changes the way we think about technology. Cloud is a computing model providing web-based software, middleware and computing resources on demand.

• By deploying technology as a service, you give users access only to the resources they need for a particular task. This prevents you from paying for idle computing resources. Cloud computing can also go beyond cost savings by allowing your users to access the latest software and infrastructure offerings to foster business innovation.

• “Pay as you go” model.• Public and/or hybrid and/or private clouds.• XaaS : SaaS, PaaS, IaaS, …• API (Application Programming Interface).

Cloud computing

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Cloud computing. A model for delivering IT services in which resources are retrieved from the internet through web-based tools and applications, rather than a direct connection to a server.

http://www.investopedia.com/terms/c/cloud-computing.asp

API (Application Programming Interface). An API specifies how some software components should interact with each other. It comes in the form of a library that includes specifications for routines, data structures, object classes, and variables.

http://en.wikipedia.org/wiki/Application_programming_interface

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18Source : Gartner

Distinctions between cloud deployment models and service types are blurring

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“Classic” devicesIndustry

{ }{ }{ }

ChipsCars

SQL / NO SQLDatabases Servers &

Applications

ModernBrower AppAppAppAPI / JSON{ }{ }{ } Data Social

Smart HomeSmartcities

Wearables

Hybrid Cloud

Global computing platformHybrid Cloud, industry 4.0, no sql, REST, JSON, jQuery, Backbone JS, …

Programmable WebCloud, API, apps, Open/Big Data, Chrome, HTML5, Responsive Design, IOT

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Communism ;-)

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• Highly Empowered and Resourceful Operatives.• New innovators in companies and organizations.• Heavily involved in the creation, development and launch of

projects with high added value and based on intensive use of ICT resources (especially from the Cloud).

• The world of education has to prepare a digital revolution and to adapt its transmission of knowledge to the new needs of the professional world.

We can be HEROes

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• Distributed co-creation is a the new model.• Thanks to cloud computing, data, mobile and social technologies,

the ability to organize online communities, to develop, and to commercialize new products and services, is moving from the professional sphere to the public sphere.

• Employees are members of these 2 worlds now subject to a stronger and more balanced interaction.

• BYOD / BYOA ... Bring Your Own Device / Application.• The company must identify the activities of its employees around

ICT and establish internal collaborative processes to support the development of these activities.

Co-creation

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Cloud computing. Also known as collaborative economy. Hybrid market model, in between owning and gift giving, which refers to peer-to-peer-based sharing of access to goods and services, coordinated through community-based online services.

https://en.wikipedia.org/wiki/Sharing_economy

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A social and economic system driven by digital technologies that enable the sharing of assets from space to skills to objects to money in ways and on a scale never possible before.

Social (and ICT) technologies radically disrupt communications, marketing, and customer care. With these same technologies, customers now buy products once and share them with each other. The sharing economy impacts core business models.

2 main principles :• shared access is better than individual ownership;• shift from products to services based on reciprocity.

… I want to do things, not to own things.

Adapted from www.euro-freelancers.eu & www.altimetergroup.com

The rise of the sharing economy

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Me ><Ownership ><

Global ><Centralized ><

Competition ><Enterprise ><

Ads & marketing ><Credit ><

Money ><B2B & B2A ><

(Hyper) Consumption ><

UsAccess and serviceLocalDistributedCollaborationPeopleCommunityReputationValueP2PCollaborative Consumption

Adapted from www.euro-freelancers.eu

Values of the sharing economy

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• Increasing population density. Population density enables sharing to occur with less friction. Access to more people mean more points of supply.

• Drive for sustainability. There is growing awareness about the environmental impact of our consumption habits. Reselling, renting, co-owning, or gifting maximizes usage and reduces the impact of physical goods that were once bought and discarded after limited use.

• Desire for community. A latent desire to connect with people and communities is re-surfacing. Individuals can now bypass faceless brands as they transact with each other.

• Generational altruism. The internet is a persuasive technology. It teaches people the power of sharing and collaboration. Once people experience that power, it’s natural to apply the same logic.

Adapted from Altimeter Group

Sharing economy : societal drivers

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• Monetize excess. Anytime there is a resource that stays idle for much of its lifetime, there is an opportunity to takeadvantage of it.

• Increase financial flexibility. As owners begin to find uses for idle inventory, the possibility emerges for earning income and gaining greater financial independence and empowerment. It’s a new world of the perpetual freelancer and micro-entrepreneur.

• Access over ownership. Individuals who can’t afford luxury goods can now rent them. Businesses can hire on demand workers or rent on-demand space. We’re moving to a world where access to goods, services, and talent triumphs ownership.

• Influx of VC funding. Investors are key to the rise of the Sharing Economy. In other internet-related markets, VC funding has already been a core force for the growth of an industry.

Adapted from Altimeter Group

Sharing economy : economic drivers

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• Social networks. Social networking facilitates peer-to-peer transactions by matching up supply and demand that wasn’t previously possible. They help build trust between buyers and sellers.

• Mobile devices and platforms. Many startups in the Sharing Economy are mobile-driven. The rise of smartphone adoption means that customers can increasingly offer or locate goods and services anytime, anywhere.

• Payment systems. E-commerce and payment platforms are required to broker transactions between buyers and sellers. In the future, new forms of value will include nontraditional currencies or new forms of measurement that account for resale or multiple users in the total cost of ownership.

Adapted from Altimeter Group

Sharing economy : technology drivers

Page 29: HEC Digital Business. Sharing Economy and other trends

29Adapted from Altimeter Group

Desintermediation (“uberisation”)

Hospitality.Homeowners displace

hotels. They can monetize their extra space by renting out rooms

or homes to travelers from around the world.

Labor.Marketplaces empower workers

to find virtual work and managers to hire on-demand staff. Businesses and individuals are connecting to employees on their own.

Office rental.Companies offset costs by renting space from and to each other. This growing marketplace enables on-demand, ad-hoc workspace rental

in a pay-as-you-go transaction.

Banking. Consumers skipthe bank. P2P lending and

crowdfunding services sites enable consumers to lend directly to each other

and to bypass traditional financial services.

Transports.Every car-sharing vehicle

replaces 9-13 vehicles, reducing thenumber of hours a car sits idle in a garageor parking lot and car ownership overall.

Products & Apparel.Consumers can now rent or

exchange any number of physical goodsinstead of buying them from

traditional retailers.

H F

G

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www.kickstarter.com

Kickstarter is a new way to fund creative projects. Kickstarter is full of projects, big and small, that are brought to life through the direct support of

people like you.

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• Zipcar Partners With SNCF to Offer New Mobility Solution in France.

• Maven, the new service from GM is the latest in a string of moves by the automaker including a $500 million investment in Lyft.

• Citigroup agreed a $150m tie-up with Lending Club, to finance loans. Citizens Bank has bought $200m of loans from SoFi, a big student loan-focused marketplace lender.

• …

Old economy // sharing economy

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32Adapted from thegovlab.org

5 governance deficits

Legitimacy

Effectiveness

BudgetsInnovation

Expectation

Loss of confidence of citizens intheir governments, particularly because of the lack of transparency, accountability and (real) citizen participation in the decision process.

Because of their bureaucratic, centralized and rigid nature, public services are struggling to address the challenges of the modern digital world and the needs of citizens.

Deficits and budget cuts, questionable expenditures or taxes, ... suggest that governments are not really able to deal with real world problems.

Governments are paralyzed by institutional inertia and pyramidal structures. They are not agile, innovative and creative enough.

While digital empowerment is breaking down barriers to citizen participation, citizens are frustrated that governments do not allow them to contribute to public policies.

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Open Data. Institutions, local actors and governments have considerable amounts of data, but do not necessarily use them.Open Data = make them available in public data clouds.The idea is to allow other public or private players to build services and applications based on these data, following specific licences.

Page 34: HEC Digital Business. Sharing Economy and other trends

34Adapted from thegovlab.org

From Open Data to Open Government

Centralized6

Decentralized

Intuitive6

Goals

Closed6

Open

Intermediary6

Platform

Static6

Evolutive

Deliberative6

Collaborative

From a push and top-down model, to a model involving a maximum

of voices in thegovernance

process

Transition from intuition and

repetition based models to

processes based on the richness and intelligence of data, and on

wide scale experimentation,

for better decisions

Personalizationof content and services,

One2One, pertinent and individual experiences, collective proposals, …

Openness. Problems solved with the intelligence of the crowd, rather than only by public services. Validation and

co-design by alliedcitizens

Cloud, mobile,apps, augmented services,

programmable Web, suppressionof time and location barriers, NWOW,

Networks, online and cloud

platforms, 3D, DIY,

crowdfunding & crowdsourcing, loss of influence

of "historical“ monopolies and intermediaries …

Empowerment

numérique

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Walloon example

Next Ride is a mobile application based on “open data”. Now part of the “official” offer

from the public transport company in Wallonia. 1 (non professional) developer versus a

company with more than 5000 workers !

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www.bepark.eu

BePark is a network of low-cost car parks that you can access through your mobile.

This network consists of public parks as well as private ones (hotels, offices, supermarkets, etc.) which were not

available to the public so far.

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Public data = Open Data ?Europe highly promotes Open Data,

making it the default model for public services throughthe PSI (Public Services Information) directive.

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• Government officials oppose sharing that disrupts existing regulations.

• Lack of trust between peer-to-peer “buyers” and “sellers.” • Lack of industry-wide reputation systems and data standards.• Historical players view sharing as a threat to their current

business models.• Uncertainty about which startups will stand the test of time.

Adapted from Altimeter Group

Of course … it’s not that simple !

Page 39: HEC Digital Business. Sharing Economy and other trends

39Source : Orange & www.sparked.com

See you next week for Digital Business ;-)

A connected cow transmits 200 MB of data each year.

Page 40: HEC Digital Business. Sharing Economy and other trends

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